San Diego sued over Belmont Park

Plunge renovations, reopening contemplated as legal battle heats up

MISSION BEACH  Businessman Tom Lochtefeld, who oversaw the renaissance of Mission Beach’s Belmont Park over the past decade, is suing the city of San Diego for $25 million following a rent dispute over the city-owned property that led him to file for bankruptcy and put the amusement park’s future in doubt.

While that battle plays out in court, the park remains in court-appointed receivership and repairs are scheduled for the historic Plunge pool — one of the park’s most popular attractions — in an effort to open its doors for the coming summer season.

Lochtefeld, who lost his rights to the property’s master lease in bankruptcy proceedings earlier this year, continues to run day-to-day operations at the park as he slowly transfers assets to the bank that foreclosed on him. In the lawsuit filed Monday in Superior Court, Lochtefeld accused the city of breach of contract and fraudulent misrepresentation for preventing him from a second major expansion of the park.

“The story is not over by a long shot,” said Lochtefeld, who has battled the city for the past 18 months. “This thing is not going to go away and I’m not going to go away.… My biggest fear is this is just going to be a calamity for the citizens.”

Jonathan Heller, a spokesman for the City Attorney’s Office, said the city hasn’t been served with the lawsuit yet but plans to file a motion to dismiss the case.

“The city’s taxpayers should not be forced to expend resources on meritless lawsuits,” he said. “Our preliminary investigation reveals that the allegations in the lawsuit are not and cannot be supported with evidence.”

The most noticeable fallout from the battle is the closure of The Plunge, which Lochtefeld shuttered in May because it needed repairs that he couldn’t afford because of the rent squabble. The receiver is in the process of hiring a contractor to make temporary repairs that would allow the pool to open again for about six months. An engineer hired by the city pegged those costs at $198,000 although the long-term restoration of the facility would require $1.2 million in repairs.

Irv Rawdin, 87, of Mission Beach, said he and his wife are frequent users of the pool and are hopeful it will reopen soon. He questioned why the city hasn’t been more open about why it took the hard stance that led to its closure.

“I can’t say anything negative at all about Tom Lochtefeld because he was very good to us, extremely good to us,” Rawdin said. “All of us just don’t understand why the city refused to cooperate, to actually cause us a lot of aggravation.”

The rent dispute that began last year between the city, which owns Belmont Park, and Lochtefeld set off a chain of events that culminated in a bankruptcy hearing in June that ended with Lochtefeld handing the keys over to East West Bank, which he owed $17 million.

The relationship had soured after the city spurned Lochtefeld’s plan to develop a hotel and water attractions to make the site economically viable. City officials say the plan was never formally submitted — as required by the lease — and therefore Lochtefeld was no longer eligible for certain rent subsidies as of June 2010. Annul rent increased from $70,000 to an estimated $550,000.

In his lawsuit, Lochtefeld says he presented his hotel plan in December 2006 and it was received positively by city officials. He then repeatedly asked if there were any objections or requested changes and the city didn’t respond. Two years later, Lochtefeld was told by the administration of Mayor Jerry Sanders that the project wasn’t viable.

The two sides then failed to reach a new deal to operate the park under different terms or continue the existing rent subsidies. Lochtefeld refused to pay the higher rent, the city declared him in default and he filed for bankruptcy.

The court-appointed receiver, Ken Krasne of Los Angeles, now controls the park’s finances while East West Bank decides what to do with the lease rights and how to best recoup its money. Krasne didn’t return a message left Tuesday on his cellphone.

What’s not in dispute is how Belmont Park has fared since Lochtefeld took over operations in 2000. The park opened to great fanfare in 1925 but fell into disrepair in the 1960s before closing in 1976. It reopened 20 years ago but struggled financially. The city asked Lochtefeld, a successful purveyor of wave machines, to take over in 2000 and he led a turnaround that increased the venue’s annual revenue from $9 million to $21 million.